Google's Schmidt on What Sets Silicon Valley Apart

By

Jessica E. Vascellaro

Updated Nov. 5, 2009 12:01 a.m. ET

Google Inc. Chief Executive Eric Schmidt has snapped up Bay Area talent for years, first as an executive at Sun Microsystems Inc., then as CEO of computer maker Novell Inc. and now as the 54-year-old boss at Google.

The hiring has been particularly fast and furious at the Internet search giant, which has grown to more than 19,600 employees world-wide. Roughly a third of those workers live in the Bay Area, according to Google.

ENLARGE

Google CEO Eric Schmidt cites the weather as a reason young people flock to the Bay Area.
Reuters

Google recruits from Stanford University and the University of California, Berkeley, among other places, and has set off hiring wars with rivals such as Microsoft Corp. Now Google is poised to beef up its work force again as the tech industry comes out of a recession and workers remain plentiful amid high unemployment rates in Silicon Valley.

Here's what Mr. Schmidt, a 33-year resident of the Bay Area, had to say about Silicon Valley hiring and the role of the weather in the local labor market:

Q:With so many other schools in the U.S. and around the world doubling down on engineering and technology, is Silicon Valley at risk of losing its edge?

A: Anyone who bets against Silicon Valley is betting against a successful track record of 40 or 50 years.

You've got the universities. You've also got a very, very effective venture-capital industry, which is very well honed and you have the creations of at least a biotech revolution and a high-tech revolution, and the possibilities of the green revolution being created here.

When I'm asked about this, and I've been asked this for years, I answer this the same: It is the weather. There's a reason why generations of young people who are willing to challenge assumptions and so forth have ended up in the Bay Area, and the weather is not a small part.

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Q:What makes Silicon Valley and Silicon Valley workers different, and can that be replicated elsewhere?

A: You need a bunch of things. You need a venture-capital industry, you need a culture that will be tolerant of failure and the laws have to allow you to fail and not be criminalized. You have to obviously have a global perspective.

It has been remarked many times in Silicon Valley that when you walk through Silicon Valley, the majority of the people do not look like WASP-y Americans. They at least visually appear culturally different and they are often from India, for example. These are all reproducible but they aren't reproducible easily.

Q:Many of the industries you have outlined, like biotech and energy, require sustained investment and lots of investment in capital-intensive infrastructure. Does Silicon Valley have the culture to wait for those sort of transformative initiatives to bear fruit?

A: I think it is a mistake to assume that the only interesting businesses are the ones which require no capital like Web-based businesses. I don't see any particular reason why high-cost capital business cannot also be built in the same cauldron as these low-cost ones.

Q:As Google starts hiring again, what percentage of your new hires will come from the Bay Area, and how does that compare to previous years?

A: I suspect it will be pretty similar. The supply lines are pretty much the same every year.

Top universities, key technical companies, talent that wants to move to Google and so the primary hiring has been, if you think of universities, has been Stanford and Berkeley. And then you have a couple places like MIT and Carnegie Mellon.

But I would say that if you include people who are currently students and therefore they already live in Bay Area, it is probably a very healthy percentage.

Q:A lot of workers in Silicon Valley have been laid off. Do you think they will end up back in the tech sector? Will Google hire them?

A: I don't know about Google.

I do think that they will be rehired and especially if they have maintained their currency.

The problem with being laid off in Silicon Valley is if you are laid off for a few years, which would be terrible, during that time, the technology moves forward, so you have to keep yourself current.

If they maintain their currency, I think there are very good hopes for them.

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